How to risk-proof your next event

From large-scale political rallies, sporting events or music concerts to local school fundraisers or corporate team-building days, the uncertainties faced by events of all types and sizes need to be managed intelligently and proactively. Many well-planned events have had to deal with unforeseen disruptions related to the venue, an unpredictable number of attendees, the weather and faulty technology and were left reeling by the social media backlash, a decrease in public confidence and future attendance.

The largest reputational damage for event organisers usually occurs when there is harm to people and damage to the venue itself, which results in having to defend against legal action and liability. The problem event organisers face is that reputational damage can occur suddenly, without warning, and could result in the event never being held again.

It is worth remembering that when major events go wrong, the human consequences can be catastrophic, with the death toll reaching into the hundreds, sometimes even thousands. Just over a hundred years on from the largest sporting event disaster post Roman Empire, which occurred at Happy Valley Racecourse in Hong Kong, 55 years on from the world’s worst stadium disaster which transpired in Lima, Peru, and 30 years on from Britain’s worst sporting disaster at Hillsborough stadium, lessons continue to be learnt from events that have gone wrong. These horror stories are not limited to sporting events, with some of the worst event catastrophes spanning across a broad range of events such as carnivals, New Year’s Eve celebrations, music concerts, religious festivals and formal political or academic ceremonies. The bulk of the worst event disasters around the world are attributed to structural collapses, stampedes and crushes, equipment malfunction, vehicle accidents, structural fires, explosions and severe weather.

“Every event requires a carefully considered, tailored risk management solution which allows event organisers to assess all possible risks to their events and their stakeholders. The organisers need to create an event risk committee that ensures risk management occurs at every stage of event production from inception to close."

This committee will be well advised to implement the following five-step process to stay on top of its event-related risks.

1. Risk management framework/plan formulation An essential aspect of planning any event involves designing and implementing a risk management framework or plan that follows globally recognised risk management standards and guidelines, in order to handle anticipated and unanticipated risks. The framework will help event organisers to strategically anticipate, prevent, minimise and plan responses to mitigate their identified risks. The framework includes elements such as management commitment, responsibilities, policies and procedures, risk criteria and resources required, and gives structure to the next steps in the risk management process.

2. Establishing the context Context-setting involves defining the objectives that the event organisers want to achieve, how they intend to achieve those objectives, identifying key event stakeholders and their objectives, and the internal and external factors which may get in the way of achieving those goals. Internal factors could include current staff capabilities, culture, information systems, and decision-making processes. External factors involve looking closely at the world around us and how this external environment may influence the running of the event. These factors range from political, economic and societal to technological and environmental factors. The committee would also need to use different levels of analysis when looking at these factors, from global to local.

3. Risk assessment (identification, analysis and evaluation) Event risk committees often try to grapple with myriad risks that should be addressed by focusing solely on the nature and location of the event. A silo mentality can be dangerous when identifying event-related risks, especially when the interdependency of these risks, as well as unanticipated risks, are overlooked. Event organisers may not have a risk manager at their disposal and, in all likelihood, will be left feeling overwhelmed by the number of risks that require immediate attention and budget allocation. For simplicity, following the Harvard Business School approach when managing event-related risks could prove beneficial. Professor Robert S Kaplan suggests all risks which affect an entity, project or event fall into one of three categories, namely preventable, strategy and external risks.

Preventable risks, in this case, are internal risks that arise from within the ‘confines’ of the event site and all proposed activities and are often operational or behavioural in nature. These risks are controllable and should be avoided or eliminated as far as possible because they have no strategic benefit. Typical preventable risks that an event will face include:

  • Crowd management

  • Regulatory compliance

  • Human health

  • Safety and security

  • Criminal activities

  • Quality management

  • Logistics

  • Technical and temporary infrastructure

  • Power/electricity

  • Damage to property and facilities

  • Event downtime

  • Staff and volunteers

  • Vendors

Strategy risks are both internal and external to the event and entail voluntary risk-taking in order to ensure the success of the event. It is important for event organisers, for example, to react quickly to new trends and to take calculated risks in predicting them. The success of the recent ‘Super Hero Sunday Double Header’ between South Africa’s four Super Rugby franchises demonstrates how SuperSport turned around poor crowd attendances by creating a brand that would be attractive to an ever-more influential and younger consumer base. An event’s strategy risks could include:

  • Contracts and contractors

  • Financial exposure

  • Event sponsors and partners

  • Competition

  • Brand and reputation

  • Outsourcing

  • Marketing

  • Social media and public sentiment

  • Insurance

  • Failure to innovate

  • Entering new markets

  • Intellectual property

  • Customer retention and preferences

  • Communication and co-ordination

  • Local community relations

  • Environmental and social responsibility

  • Key personnel dependencies

  • Event cancellation

External risks occur outside of the event organiser’s influence or control and cannot be prevented, which is why managing the consequences should be prioritised. The following external risks should be addressed: Severe weather such as storms, lightning and high winds

  • Natural disasters like floods and earthquakes

  • Domestic or international terrorism

  • Cyber risk

  • Strikes or social unrest

  • Changing political and economic conditions

  • Spread of infectious diseases

  • Droughts and water restrictions

  • Fire/explosion

  • Regulatory changes

Once the event risks have been identified and categorised, they are analysed in terms of their consequences and probabilities of occurrence. They are evaluated thereafter describing the priority that should be assigned to each risk. 

4. Risk response  Once the event risk assessment stage is complete, the event organisers must decide on, develop and implement the actions required to prevent its activities from being disrupted. They will have an all-encompassing risk view which addresses the full spectrum of the insurable, partially insurable and uninsurable risks. Risk-mature event organisers understand that while insurance is an important aspect of risk management, it is by no means the only tool at their disposal. They employ the following four risk treatment options:

Risk avoidance: In certain cases, the elements and activities which carry a risk can be avoided or bypassed. The aim of this risk response strategy is to eliminate the uncertainty associated with the risk at the event and is particularly relevant to high-priority risks.

Risk reduction: If a risk associated with a particular component of the event cannot be avoided, perhaps it can be reduced. This refers to traditional risk mitigation or reduction of either the likelihood of the risk occurring or the impact that it will have. The aim of this risk response strategy is to modify the exposure or size of the risk to acceptable levels through contingency plans like relief personnel, backup equipment or generators.

Risk acceptance: Certain risks must be taken when running an event. The risk may be accepted perhaps because there is a low impact or likelihood. The aim of this risk response strategy is to take the risk and delegate responsible oversight to closely monitor these risks.

Risk transfer: Certain event-related risks can be fully or partially transferred to a third party through insurance or a service provider, like a security company. The aim of this risk response strategy is to allocate ownership to the third party best able to manage the risk effectively.

5. Monitoring and review Finally, the risks identified in the event risk profile must be continually monitored and should not be treated as a one-off assessment or snapshot. If significant changes occur to the event risk landscape, the committee’s response plans and strategies must follow suit.

It is important that event organisers understand that while not every risk can be prevented from occurring, they have a responsibility to demonstrate to their stakeholders that the risks associated with their upcoming event have been managed responsibly.

“It is also crucial to realise insurance in and of itself is not the cure-all for all event-related risks, and that buying insurance for event exposures without comprehensive risk-mitigation strategies is the riskiest approach of all.”

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